Marketing Matters is a blog that tells marketing stories from an industry, academic and student's perspective. We confront and debate today’s business trends. Views expressed by the blogs do not necessarily reflect the views of the University of Sydney Business School.

Friday, 29 May 2015

This global property and infrastructure powerhouse has replaced its twenty-year old logo with a fresh organic green mark, joining its iconic name to a single word, Lendlease.

This vibrant new look has been designed to reflect the company’s new strategy, positioning themselves within the market as a contemporary, diverse and international business. The new logo can be described as the organic and versatile “fold”, suiting Lendlease’s range of projects across industries and countries.

Another reason for the companie's re-branding lends itself back to the concept of designing for the future. Lendlease understands the need to provide their customers with a unique identity that goes from “consumer to business, enterprise to government partnerships and local to international markets”.

The new branding and strategies Lendlease will implement will take place over the next year. It will run in accordance to the “run down and expire” strategy which will systematically change brand assets according to project's stages of development.

CEO, Steve McCann states, “We have emerged out of our five year strategy to hold a strong market position and believe we have re-established the leadership position of this great organisation. As a result, the time is right to evolve our brand.”

Monday, 25 May 2015

University deadlines, group meetings, work commitments, moving to a new apartment, building furniture to name but a few. I would have to say this week has been my busiest since joining the Master of Marketing. It took a whole week without any Internet connection in my new apartment to realise just how important a commodity it is to my daily life.

The Internet meme of Maslow’s hierarchy of needs with ‘WIFI’ scrawled underneath the base came to mind on many occasions as I pondered life after the Internet. No Facebook, No Instagram, No Podcasts, No Skype and No Blackboard for my assignments - nothing, nada, zip!

Source: http://i.imgur.com/Iu9f1kf.png

After a whole week of thinking time without the Internet, here are my two thoughts I would like to share.

Firstly, have our basic needs changed? We will always require the physiological needs of food, water, shelter and warmth, as these are all basic functions of the body. So where does Internet fit in to the picture? It has become a commodity I now regard a utility in the same way I would electricity or gas, and without it, my life becomes infinitely more difficult to navigate.

I don’t believe it is a basic need or a desire to be safe and secure in the knowledge that the basic needs will be fulfilled in the future. But for me personally, having Internet access unquestionably plays a role in every other category. Tools such as video chat with family and friends can certainly fulfil a sense of belonging and love. The next stage of the hierarchy is all about social recognition, which could be argued, is one of the key drivers of Facebook. The final stage at the top of the triangle is self-actualization, which is a sense of fulfilment. This means that you are doing on the planet what you are meant to do, to ultimately be happy in life. Without Google, how can I search for what I am meant to do in my life? If like me you can remember life before Google, you will know just how hard it was to find information.

My second thought was about Maslow and his theory of motivation. I remember having just started high school when I was first introduced to this mysterious pyramid of human needs, yet today, as I study at Masters level I am still looking at the same pyramid. I think that is testament to the strong influence that a 70-year-old theory still has on the world. As a marketer, one of the insights I have gained is how we can shape the conditions that create peoples' aspirations. The model proposed by Maslow is able to explain this very complicated idea in a very simple way. In the years since it was first published, the Maslow triangle has been flipped upside down, pulled apart, chopped up into numerous diagrams, but again still remains today in many textbooks as it did in 1943.

So as much as my life wouldn’t be complete without the Internet, my understanding of human behaviour wouldn’t be the same without Maslow and his hierarchy of needs.

Friday, 22 May 2015

Despite the fact a French company owns Gucci, the notorious global brand is still seen as the epitome of “Italian luxury”. Looking past the opulence the brand radiates, Gucci has been able to successfully combine old world tradition with a profound understanding of modern technology and marketing techniques. In relation to the digital capability of companies in the luxury market, Gucci was ranked number one and labelled a “fashion genius”. The development of their online presence through the use of e-commerce, social media, digital marketing and the integration of a smartphone app puts them in an advantageous position.

Lets take a step back and think about why a global company like Gucci, rich in heritage and richer in reputation, feels the need to be skilled at digital marketing and social media.

These days consumers are using the Internet along with other browsing platforms to research the products prior to purchasing their “must have” luxury item. While a marginal 5% of luxury sales take place online, the 'digital browsing' signifies the birthplace over almost 50% of sales. In more recent times, the profit aspect for Gucci has been on a decline as “high-end” customers are switching to brands they perceive as more exclusive. Even with Gucci’s pursuit to find wealthier clients, their sales continue to decline.

Gucci was one of the first luxury brands that saw the significance of having a well-defined and well-branded digital presence. Part of Gucci’s success lends itself to their belief in providing all customers with a “Gucci Experience”, in both the real world and the virtual one. Gucci has achieved this presence by providing a broad selection of products both in its boutiques and its online store. Taking advantage of future growth, Gucci has further felt the need to invest in their e-commerce infrastructure. Even though Gucci’s digital commitment has not yet improved its global revenue, it has definitely enhanced its profile. In addition, the smartphone app has provided users with a customized experience, resulting in a 150% increase in online traffic.

The digital marketing strategy Gucci has implemented involves a
multi-faceted approach using a variety of social media platforms. In the past, Gucci has been known to combine their excessively opulent window displays with beautifully designed online video advertisements. Gucci has cleverly tied promotional campaigns to the anniversaries of some of it's iconic products. A prime example was the 60th anniversary of its legendary “Horsebit” loafers, when famous fashion bloggers were asked to show off the celebrated shoes. A large percentage of the success of these cross-promotions lends itself back to the involvement of consumers on social media, which can be seen in the size of Gucci’s online community.

As consumer trends continually change, even global companies such as Gucci need to start looking into how they can adapt, acquire new customers and potentially enter new markets. Gucci’s partnership with Fiat began with bringing out a limited edition version of the popular ‘Fiat 500’, all ensconced in trademark Gucci leather. However, it should be known that Gucci is extremely discriminating when it comes to working with others. “Partner carefully,” warns Nicole Marra of Gucci, and so they should I say! Gucci’s aim in maintaining constant conversation with its customers, as well as its marketing partners, at the end of the day all relies on their digital strategy. Whilst digital marketing campaigns and projects are important, so are building long-term relationships.

Tuesday, 19 May 2015

I have been a long time admirer of the serial entrepreneur, engineer, inventor and investor Elon Musk. As the cofounder of Paypal, he has amassed a personal wealth of approximately $13.3 billion and currently sits at number 100 on the Forbes World’s Billionaire list. Like a real life Tony Stark from the Iron Man comics, Musk is every bit the superhero, just without the suit. But do not let his cartoonish ideas fool you, with his vast personal wealth his ideas are quickly changing the world in which we live.

As CEO of Tesla Motors he has already achieved a significant milestone by becoming the third largest selling luxury car company in California. To reach this level of success in such a short time with a petrol engine car would have been quite a feat, but this is an electric car company! Then again, there really is nothing ordinary about Tesla and its CEO, Elon Musk.

Typically you would find most car dealers along busy public roads with large extravagant showrooms. Tesla on the other hand takes a very different approach and meets with customers in public shopping malls. Next to your traditional clothes and food outlets you can find their small showrooms that typically house one or two model cars. You might be out for a spot of shopping when you walk past a show room and casually drop by to talk with a Tesla representative about the benefits of electric cars. Moving in to the mainstream shopping outlets has gained Tesla a significant amount of exposure by breaking from the traditional way of marketing and selling cars.

Last week Musk made the very exciting announcement of the Tesla Powerwall. The wall mounted energy storage unit can hold 10-kilowatt hours of electric energy. The traditional problem with renewable energy such as solar panels is that you need to store the energy for even distribution through out the day. For the small cost of $3,500, you no longer need to fully rely on getting your power from the traditional utilities providers. How long until we see the Tesla Powerwall being sold in shopping centres alongside their electric cars?

As if Musk didn’t have enough on his plate, he is also the founder of the SpaceX programme. This ambitious project was set up to bring down the costs of space travel using reusable rockets with the ultimate goal of colonising other planets. This is not as far fetched as it might sound. The SpaceX program was awarded $1.6 billion by NASA in 2008 to deliver twelve payloads of supplies to the International Space Station. The significant investment in commercial space travel could make it as common as flying on an airplane in less than a century.

I for one am excited by the possibilities a new future ushered in by entrepreneurs like Elon Musk might have to offer. With change comes opportunity, so as a marketer, I will be watching his business ventures closely to see what future opportunities they may bring.

Friday, 15 May 2015

In the digitalised world we are living in today, we can definitely see a shift to more digitalised platforms in which more powerful and newer technologies are changing the way consumers live their lives. It is important that companies are taking hold of this shift by implementing more customer-centred strategies to ensure their position within the marketplace. With this being said, the expectation of services has increased and particularly been felt within the baking sector. Consumers are expecting things to be much quicker, more seamless, easier and more personalised.

The Westpac Banking Group has realised the changing needs of their consumers and the need for their company to be radically simplified, particularly through the compression of their many processes into world-class digital platforms. In simpler terms, Westpac is reinventing their brand network along with their customer experience by simplifying their products and processes.

The service focused strategy Westpac has implemented has been reflected in a growth in customer numbers, high customer satisfaction among both consumer and business customers, and improved growth and increased return.

According to the earning results that were released at the beginning of May, the Westpac banking group made a large $84 million dollars from digital sales in the financial first half of 2015. To put it in perspective, digital sales currently makes up 13.3 per cent of total retail sales, including digital transactions and online loans. The bank is continuing to move away from manual transactions, such as phone services, to online and smart ATM’s.

Westpac has revealed it has over 4 million digital customers, proving to be an increase from the 3.97 million in the second half of 2014. 3.1 million consumers have migrated to the banks online banking platform, Westpac Live, while 300,000 businesses were migrated to the platform.

What strategies have Westpac implemented that is driving their consumer growth?

Firstly, the banking giant has initiated and installed video conferencing services to their Australian branches in the hope of improving the services available to their customers. Through the use of technology, particularly their online lending application called LOLA, Westpac has made $30 billion dollars worth of pre-approved lending available to their SME customers.

The next stage of Westpac’s digital transformation is a customer service hub that will aim to improve efficiency and support the service focused strategy. Westpac’s CEO, Brian Hartzer, also mentioned the bank’s Asian digital transformation. “We have completed technology foundations including global trade platform and core banking systems. We are now offering faster end-to-end processing,” he said. Westpac is building capabilities and capacity in Asia to “seamlessly connect” its customers to the increasing flows of global trade, capital and people between A/NZ and Asia.

I am sure from this we can see and will continue to see many companies like Westpac implement digital platforms and services within their business strategy to ensure both their position within the market and to ensure that there is a drive within consumer growth.

Monday, 11 May 2015

The winds of change are blowing through the department stores of the clothing company Abercrombie & Fitch. Established in 1892 in New York by David T. Abercrombie and Ezra Fitch, the brand was originally a purveyor of sporting goods as well as shotguns, fishing rods and camping equipment. After filing for bankruptcy, A&F was revived in 1978 as a mail order company specialising in hunting clothing. By the early 90’s the company’s direction changed once again, this time by focusing on the youth market and targeting aspirational “casual luxury” buyers.

Sexualised advertising has become synonymous with the retailer Abercrombie & Fitch and its offshoot brands, Hollister and Gilly Hicks. Shirtless models adore the shop front for each new store opening. Inside the store attractive All-American looking staff make the brand come alive by serving customers with shopping bags featuring the latest fashion pin ups. For almost a quarter of a century, the provocative use of advertising has helped to establish A&F as a leading fashion brand. The problem is, this tactic is no longer working.

Abercrombie & Fitch share price is in free-fall and dropped 39% in the last 12 months alone. Its merchandise appears to have lost its uniqueness and has been labelled as stale and unappealing by the millennial generation they are targeting. The company has also been criticised heavily in the media after comments made by the CEO that the brand is only for "the good-looking, cool kids".

Source: cblltd.co.uk

As part of a major rebranding, the executives at Abercrombie & Fitch are looking to reposition the company and the way they interact with customers. Last week they announced that they would no longer hire employees based on their body type and physical attractiveness. Rather than be known as models, the in store staff will now become “brand representatives”. By the end of July, all sexualised images will be replaced with new advertising designed to portray a more wholesome image.

So where did it all go wrong?

As with so many other successful companies that fell on hard times, A&F simply failed to adapt to a changing marketplace. You could say they fell asleep at the wheel of a billion dollar multinational company and hoped that their reputation alone would sustain their success. They didn’t follow consumer trends or insight gained from market research until it was almost too late. It will be interesting to see if this radical change in direction can help to transformation the fortunes of their flagship stores.

Abercrombie & Fitch has already had several major changes in direction since its creation; this may be just the latest one. To be successful again they must listen to their audience and redefine the brand's image without loosing its history and legacy. If they want to continue selling to a younger audience, they must understand what is “cool” to this segment and find ways to connect to them with effective marketing. Building a better picture of their audience through gaining meaningful insights and foresights is essential in defining the brands image going forward.

Thursday, 7 May 2015

How can we as marketers work with consumers to co-create brand innovation ideas?

Based on the S&P 500 index of leading US Companies, Professor Richard Foster from Yale University is of the understanding that the average lifespan of a company in today’s contemporary society has decreased more than 50 years in the past century. As a comparative, companies in the 1920’s saw a healthy average lifespan of 67+ years, opposed to today’s companies averaging on 15 years.

What we as marketers need to understand is that as consumers move more rapidly, businesses must become more agile to compete, or they will die. With this being said, businesses are now taking a conscious effort to understand just how important innovation is in order to survive in the marketplace.

Founder of Melbourne based company, Brandhook, Pip Stocks, is of the belief that innovation is the key to drive growth. With that being said, innovation itself needs to be anchored in the undiscovered needs or “pain points” of consumers, and the corresponding solutions need to then be rigorously tested. As barriers fall away between brands and consumers, Brandhook encourages their clients to commit to a co-creation program.

So how can businesses quickly gather insight in a cost effective way and still have the rigor needed to build confidence in the ideas generated?

Brandhook promotes the idea of spending time with your consumers in an “online community”, where you can “hang-out” with a good representation of people who buy your product or service. Over a period of time, you gain an understanding of your consumers' lives, their needs and their attitudes and perceptions to various brands and experiences. Through observing, probing and getting your consumers to undergo a variety of tasks, Pip believes you can quickly and cost effectively gain insight that will kick-off the innovation process.

Head of Category and Insights at H.J. Heinz Company says “ Understanding our Consumers helps us to ensure big innovation is successful, which provides a key platform to deliver sustainable category growth”.

As part of the Masters of Marketing program, the Contemporary Consumer Insights class has the pleasure of listening to the inspiring Managing Director of “House of Brands”, Bryony Ranford. A concept that was discussed was the importance of research in provoking information that will generate innovative ideas. Due to the influx of technology, engagement these days has become highly fragmented and saturated, so the ability to adapt is always paramount. A key factor that resonated with me was that good consumer insights was attained by having the ability to find touch points where someone is receptive to the message you are trying to convey. It is not so much as to the “what” in marketing anymore, but the “how” and “when”.

There is a menu of different approaches we can take to build consumer knowledge, however it’s the innovation, rigour and context we need in ensuring future success.

Monday, 4 May 2015

Chances are, if you don’t cultivate your own brand these days you won’t be noticed. Worse still, failure to manage your own brand could result in someone else determining it for you!

Branding has come a long way from its initial meaning as a mark of ownership, such as the branding mark you would find on cattle. It later became a guarantee of quality, as people would burn branding marks into boxes of wine. In the 1870’s trademark registration first came to prominence in America. As brands started to be trademarked, they began to signify quality and other functional benefits which could demand higher prices.

With the invent of the mass media in the 1920’s, brand became more familiar with what we see today by giving products desirability and emotional attachment to build brand loyalty. In the 1980’s, the world began the process of globalisation that ushered in a new era of brand as a sense of identity. Everything can be branded, from companies to countries and even people.

Source: http://www.ibeamconsulting.com

Personal branding is so important in the modern world as it can help to build credibility and showcase your skills. Building a strong personal brand is also a useful way to connect with your target audience and leave your mark. It can help to distinguish yourself from your competition and focus your energy to help understand what you do best.

To build a personal brand, you might begin by considering what you are passionate about: what are you good at and what does the world need. By defining your brands purpose you can use it to focus your career and life and help it to become alive in the minds of others. Brands are so powerful because they exist in all of our minds, but they can change and evolve over time.

Once you have defined your brand purpose, you need to make it come alive. This could be visually through the clothes you wear or your physical appearance. How you present yourself online is incredibly important in the modern world in which we all live. However, even your choice of ringtone can influence what people think of you and your brand. So think carefully about how you want your brand to be represented and who you would like your brand to speak too.

The Amazon founder, Jeff Bezos, believes “your brand is what people say about you when you’re not in the room”. If a gap exists between the perception of your personal brand and the image you want to represent, you may have to consider rebranding yourself to reach your desired audience. But remember, in life you never get a second chance to make a good first impression, so make sure your brand says the right things about you.

About the Bloggers

Alyce Brierley is a student in the Master of Marketing Program at the University of Sydney Business School. With a degree in Creative Industries (QUT), she has recently returned to Australia after working for the last six years in Paris as Copywriter and an English Language Consultant. Alyce is a culture, travel, food, and wine enthusiast with a love for learning languages. She is currently working in partnership with a tech start-up in the wine industry as a wine blogger.

Bowie Chen is from China and a current student in the Master of Marketing program at the University of Sydney Business School. Bowie has several years experience working in FMCG marketing, media (esp. TV station), and consulting firms.

Hazel Chen has 8 years work experience in the Beverage Manufacturing Industry with the role as Technical Leader and Manager, covering Logistics, Marketing, Laboratory and Prototyping function. As a part of Master of Marketing program, she has the confidence to consolidate all the experience with Marketing study to understand overall market to a great extent.